SREI Infrastructure Finance to offer public issue of NCDs

SREI Infrastructure Finance, a company engaged in providing financial products and services for the customers engaged in infrastructure development and construction is coming with a public issue of NCDs.

The company will offer secured, redeemable NCDs of Rs 1,000 each, aggregating Rs 150 crores. The company is registered with RBI as an NBFC and infrastructure finance company (IFC). Allotment will be on a first come first serve basis. You can choose to apply in the physical form or demat form as it suits you. The issue is currently open and closes on October 20 14, 2012.

The NCDs on offer have these options:

Series I: Interest will be paid on a monthly basis at the rate of 9.84% per annum. NCDs have a tenure of 7 years. You have a put option at the end of 5 years. You need to apply for a minimum of 100 NCDs or Rs 1 lakh.

Series II: Interest will be paid on a quarterly basis at the rate of 9.92% per annum. NCDs have a tenure of 7 years. You have a put option at the end of 5 years. You need to apply for a minimum of 100 NCDs or Rs 1 lakh.

Series III: Interest will be paid on a yearly basis at the rate of 10.30% per annum. NCDs have a tenure of 7 years. You have a put option at the end of 5 years. You need to apply for a minimum of 10 NCDs or Rs 10,000.

Series IV: Here Rs 1,000 invested doubles on maturity at the end of the seventh year, giving you a return of 10.41%. You need to apply for a minimum of 10 NCDs or Rs 10,000.

The NCDs proposed to be issued under this Issue have been rated 'CARE AA' by CARE and AA by Brickworks.

Why to apply: The NCDs are secured and you can choose to receive interest on a monthly, quarterly, annually or cumulative basis.

Why not to apply: Since the issue size is relatively small, the NCDs are likely to be illiquid and thinly traded. Another NCD issue which is open of Muthoot Finance, offers a slightly higher coupon rate.